https://www.taxtmi.com/highlights?id=102214 Commercial expediency of interest-free advances to a wholly owned subsidiary should be assessed from the perspective of a prudent businessman, without substituting the Revenue's commercial judgment. The note addresses deduction of interest on borrowed funds advanced to a special purpose vehicle formed to acquire land for group business operations. Documentary evidence of the subsidiary's land-acquisition purpose, subsequent lease of the land for the proposed business, and a board-approved start-up interest holiday supports the business purpose of the advance. Delay in completing land-acquisition formalities does not, by itself, negate that purpose. Interest expenditure under section 36(1)(iii) is described as allowable, with the disallowance deleted. en-us Thu, 30 Jul 2026 08:52:44 +0530 Thu, 30 Jul 2026 08:52:45 +0530 TaxTMI RSS Generator https://www.taxtmi.com/highlights?id=102214 Commercial expediency of interest-free advances to a wholly owned subsidiary should be assessed from the perspective of a prudent businessman, without substituting the Revenue's commercial judgment. The note addresses deduction of interest on borrowed funds advanced to a special purpose vehicle formed to acquire land for group business operations. Documentary evidence of the subsidiary's land-acquisition purpose, subsequent lease of the land for the proposed business, and a board-approved start-up interest holiday supports the business purpose of the advance. Delay in completing land-acquisition formalities does not, by itself, negate that purpose. Interest expenditure under section 36(1)(iii) is described as allowable, with the disallowance deleted. Highlights Income Tax Thu, 30 Jul 2026 08:52:44 +0530 https://www.taxtmi.com/highlights?id=102214